Reference no: EM133129223

Would the answer to the last question below(***) change if, as a congressman, you were very interested in getting reelected, and if:

a. A powerful lobby group representing a large corporation strongly favors a significant corporate tax cut in their specific industry. State if your answer would change in this scenario, and explain why.

b. All businesses, from sole proprietorships and partnerships, to medium size businesses and large corporations would greatly benefit from a proportional business tax cut. State if your answer would change in this scenario, and explain why.

***Based on the comparative analysis done by the economist, if you were indeed a congressman, which option would you vote for and why?

Recall these formulas:

Change in RGDP = GM * Change in G GM = 1/(1 - MPC)

Change in RGDP = TM * Change in T TM = -MPC/(1-MPC)